10 Out Of 11 Sectors Are NOT At All-Time Highs
New Bull Market Bro
Without much volatility and without a lot of economic reports throwing up caution flags, all of the major averages - the Dow, the S&P 500 and the Nasdaq 100 - were able to push to new all-time highs (although the Russell 2000 still has a LONG way to go to reach that point). I probably don’t need to tell you that these aren’t inflation-adjusted all-time highs that these indexes are hitting yet, but it does demonstrate that investors are still riding the high of a highly anticipated rate cutting cycle from the Fed. For the second straight week, we’ve gotten a 2023-ish move higher in equities, which means most of the gains were limited to the usual favorites again - large-cap, tech and growth.
It’s possible we’ve moved back to the point where investors are talking themselves down a bit from peak rate cut enthusiasm, the 10-year yield moved up by nearly 20 basis points on the week, but they’re still confident enough about the overall direction of the economy to keep scooping up risk assets. The defensive move that kicked off 2024 seems to have completely faded and the current signaling indicates risk-on conditions again. One phenomenon we have seen over the past two weeks is higher stock prices (although breadth has turned narrow again) coupled with lower long-term Treasury prices. This is more what you’d see in traditional risk-on behavior and could be indicative that investors are really believing in the soft landing narrative.
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